Service tax on mutual fund brokerage
Mahendra Naik (Business) (73 Points)
14 January 2017Mahendra Naik (Business) (73 Points)
14 January 2017
Nagendra Hegde
(Chartered Accountant)
(1948 Points)
Replied 14 January 2017
Dear Mahendra,
The small scale exemption benefit is provided those with aggregate turnover is less than lakhs in a financial year vide notification No 33/2012-ST.
As per the said definition, aggregate turnover excludes value of services not taxable/exempted from service tax.
In the instant case, the services provided by you was not exempted but taxable in the hands of some other person. Since, the value is exceeded 10 lakhs in PY, you need to discharge service tax from Rs.1.
One more issue would be whether the fund house was correct in deducting service tax from your commission income. It depends on the agreement entered between you and found house whether the commission amount is inclussive of service tax or not.
If commission is not inclusiveof ST, then fund house can not deduct service tax, instead they need to discharge over and above the value of commission amount paid to you.
/
Mahendra Naik
(Business)
(73 Points)
Replied 05 March 2017
Dear Narendra,
Sorry for the late response. I missed your reply in my mail box and only saw it today when I logged in to CA Club.
Thank you very much for your reply. It has clarified my doubt regarding the above matter.
I will appreciate if you can throw some light on another related issue. I am expecting commission of less than Rs.10 Lakh in the next FY i.e. 17-18. So, if I pay Service tax on my current year's commission, am I liable for service tax from Re.1 in the next year also even though my income will be less than 10 lakhs? If yes, is there a provision to get a refund of service tax paid, if it is later proved that the income was indeed below the exemption limit? Also what will be the position under GST, since the exemption under GST will be Rs.20 Lakhs?
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